Limit or Market orders

J

jj_jere@hotmail

With my style of trading I know if I want to buy a security within the first 10 minutes after the opening. Knowing I want to buy XYZ on the NYSE that morning is it better to place a market order or a limit order to try for a better price? From what I hear, the specialist sets the price at what he will buy or sell to you at and it's hard to purchase under the asking price.
JJ
 
even if you consider buying the stock at the offer, use a limit order. Say a stock trades at 51.20 x 51.35, and you want to buy at 51.35 (offer), always send a limit buy order at, or slightly above the offer, say 57.50. Market order can get you filled at 60, not a good idea imho.

Just my two cents

Jaba
 
in my experience, it's virtually impossible to short on anything but a market order on the NYSE.

I know others disagree but I've found it more expensive not to get in, than losing a few cents.

Re the first 10 mins: maybe that would be too risky with market orders. I only trade after the first 30 mins
 
Thanks Jaba; that's a good idea about only using limit orders. Does anyone else have any thoughts about where to place limit orders within the spred?
JJ
 
For swing trading i'll use a sell stop limit order when entering a short on NYSE . For example say a stock is trading at 25 and I want to short it if trades lower to 24.50 . Enter order with sell stop at 24.50 and sell stop limit at 24.250 . That way I avoid getting short at a significantly lower price . Could some of the pro's here please comment if there is a better way .
 
babe714:

I think you stop limit approach makes sense. If you give it 2 times the spread of freedom, it seems like you should get filled most of the time.

Just the other day I got creamed on LLY with s short fill 23 cents from the quote at the time I entered the order. This is rare, though.
 
Originally posted by jj_jere@hotmail
With my style of trading I know if I want to buy a security within the first 10 minutes after the opening. Knowing I want to buy XYZ on the NYSE that morning is it better to place a market order or a limit order to try for a better price? From what I hear, the specialist sets the price at what he will buy or sell to you at and it's hard to purchase under the asking price.
JJ
More...

Limit vs. Market orders. When trading NYSE stocks, it is helpful to understand how the trade is transacted on the floor. A limit order can be executed by the assistant to the Specialist either at the order price or better. Price improvement is commonplace. For example, if a stock is offered at 52.50, and you try to buy it at that price, but an order comes into sell at 52.45, then you will very likely get the 5 cent price improvement.

Market orders are "batched" - which simply means that they are given to the Specialist to "match up" (buys and sells). This is done every couple of minutes or so, and the delay can often times cost you money. The Specialist participates in the market orders very often, but not always on the side you would like to be included on.
 
From what I hear, the specialist sets the price at what he will buy or sell to you at and it's hard to purchase under the asking price.
More...

For my style of trading, I can almost always buy below the ask. I use limit orders, set a few cents below the ask. If the specialist is being a real stickler, and not giving me my fill, it is no problem to change my order after a few seconds. But, then again, I'm not a momentum trader; the stocks I am looking at aren't usually going anywhere (at the moment, of course). On the occasion I do buy a fast moving stock, I would agree with Jaba122, and place my offer a few points higher than the ask.

Any further discussion on this is welcome.

Cheers.

faction.
 
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